Hong Kong is in discussions with Chinese authorities to broaden cross-border investment channels and grant mainland investors access to local initial public offerings, according to remarks from Financial Secretary Paul Chan in interviews with Chinese media outlets.
The proposals being discussed with the mainland include lowering entry thresholds for qualified investors, raising southbound investment quotas under cross-border trading programmes and expanding the range of eligible products, Chan said in an interview with China Daily.
Regulators are also evaluating plans to allow mainland retail investors to subscribe to Hong Kong IPOs, Chan told the newspaper Wen Wei Po in a separate interview, which was cited by Bloomberg News.
The discussions come as Beijing tightens scrutiny of illicit offshore capital flows, shifting activity into regulated channels, a move that is expected to weigh on the lucrative businesses of banks, insurers and wealth managers in Hong Kong that depend on mainland clients.
Analysts and financial executives say the move could in the near term weigh on money flows to Hong Kong, the preferred offshore investment venue for Chinese individuals, and undermine the city’s standing as an offshore financial hub.
Reuters
